Financial activity of candidates remains low
The likely reason behind the slow formation of candidates’ campaign funds is their complicated usability. Costs associated with the replenishment and management of such funds outweigh the benefits they provide and force the candidates to choose support from the State budget.
As of September 7th, only 69 from 369 registered candidates opened personal campaign funds to raise money from the population.
Candidates’ low financial activity in setting up personal election funds is due to high costs of their establishment and management. By law, a candidate’s fund may not exceed the equivalent of USD 12 000, while the bureaucratic procedures for fund’s replenishment and expenditure reporting are quite laborious.
For example, bank transfers from citizens are made only upon passport registration, a candidate must submit regular reports to the CEC about the fund’s expenditures, unused funds have to be returned to the donors, contributions from Belarusian NGOs, which received assistance from abroad earlier in the year, cannot be accepted, etc.
All these regulations impact on candidates’ activity in collecting donations. In addition, an informal rule “initiative is punishable” has a valid impact: for example, a year ago, CEC Head Yarmoshyna openly voiced her negative attitude about political campaigns being funded by parties.
In these circumstances it is more feasible and less risky for the candidates to give up on their own campaign funds and to take advantage of the state budget quota allocated by the CEC in the state budget for publishing and printing of propaganda materials. Budget funding envisages BYR 5 million or approximately USD 595 for each candidate.
For example, on August 25th, the Liberal Democratic Party said it will print 2.5 leaflets using the state budget and said that would be their early victory in the elections. At the same time, the party kept silence about their success in collecting donations.
The rapid increase in wages has led to a decline in the ratio between labour productivity and real wages to one. Previously, the rule was that enterprises, in which the state owned more than 50% of shares in the founding capital, were not allowed increasing salaries if this ratio was equal to or less than one. The authorities are unlikely to be able to meet the wage growth requirement without long-term consequences for the economy. Hence, the government is likely to contain wage growth for the sake of economic growth.
According to Belstat, In January – August 2017, GDP growth was 1.6%. The economic revival has led to an increase in wages. In August, the average monthly wage was BYN 844.4 or USD 435, i.e. grew by 6.6% since early 2017, adjusted for inflation. This has reduced the ratio between labour productivity and real wages from 1.03 in January 2017 to 1 in the first seven months of 2017. This parameter should not be less than 1, otherwise, the economy starts accumulating imbalances.
The need for faster growth in labour productivity over wage growth was stated in Decree No 744 of July 31st, 2014. The decree enabled wages growth at state organizations and organizations with more than 50% of state-owned shares only if the ratio between growth in labour productivity and wages was higher than 1. Taking into account the state's share in the economy, this rule has had impact on most of the country's key enterprises. In 2013 -2014 wages grew rapidly, which resulted in devaluation in 2014-2015.
Faster wage growth as compared with growth in labour productivity carries a number of risks. Enterprises increase cost of wages, which subsequently leads to a decrease in the competitiveness of products on the domestic and foreign markets. In construction, wholesale, retail trade, and some other industries the growth rate of prime cost in 2017 outpaces the dynamics of revenue growth. This is likely to lead to a decrease in profits and a decrease in investments for further development. Amid wage growth, the population is likely to increase import consumption and reduce currency sales, which would reduce the National Bank's ability to repay foreign and domestic liabilities.
The Belarusian government is facing a dilemma – either to comply with the president’s requirement of a BYN 1000 monthly wage, which could lead to new economic imbalances and could further affect the national currency value, or to suspend the wage growth in order to retain the achieved economic results. That said, the first option bears a greater number of negative consequences for the nomenclature.
Overall, the rapid growth in wages no longer corresponds the pace of economic development. The government is likely to retain the economic growth and retrain further growth in wages. Staff reshuffles are unlikely to follow the failure to meet the wage growth requirement.